What businesses can do to increase the statistics of banking in the Philippines.
This is a strategy I plan to implement for my future company.
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I think that one of the issues in the Philippines that really need to be addressed is banking. This is the next step to financial freedom after getting a job. But besides not seeing the benefits of having a bank, there are so many hurdles on how to actually open one.
1) It is difficult to open a bank account here.
When I first moved here, one of the first things I wanted to do was open a bank account. The biggest bank in the Philippines (BDO) wouldn’t let me open a Checking account, unless I’ve had a Savings account with them for at least 6 months, AND that savings account has had at least more than 50,000PHP consistently throughout that time. That converts to $1,000. It’s arguably not a big deal for expats, but that’s a lot of money for citizens of a country that has a minimum wage of roughly 10,000PHP ($200/ month).
2) Cash is still king.
When I finally got my debit card from my Filipino bank account, it was neither a Mastercard nor Visa. It was something called EPS. And because I was scared it wouldn’t work, I found myself withdrawing from an ATM and then purchasing things with cash instead of just simply using my debit card.
But also, big companies like Dunkin Donuts, Jollibee, KFC have some branches where they don’t take cards for payment. I thought that was unbelievable.
I think these two hurdles added with poverty and psychology are the main reasons for this statistic:
86% of Filipino households doesn’t have a bank account.
Take note that it’s not 86% of the population but rather of households. I think that’s an important nuance, because it means that 86% of family units can’t take advantage of interest rates or have access to credit.
So here’s my plan:
Besides paying my future employees livable wage, I want to have a banking clause/ savings plan as part of their benefits. The rough idea is that, I will open a bank account for them, where I will deposit their salary but also match their savings for some time. It’s still a pretty vague idea and needs to be ironed out once I have employees.
Many international companies take advantage of the cheap labor in the Philippines, without regards to what quality of life their employees here have on the wage they’re paid. If they have any power over that, beyond providing decent wages, it would be really nice if they think about a benefit package where they can include access to banking in some ways.
It’s a small step, but I really believe it would have a large impact.
